Natalia Serna, PhD, is this year’s Rosenkranz Prize for her research examining how price ceilings on oral contraceptives impact women’s health and their access to medicine in low- to middle-income countries, particularly those of Latin America.

Serna, an assistant professor of health policy and a faculty fellow at the Stanford Institute for Economic Policy Research, explores large scale health systems and institutions in low- to middle-income countries with the goal of informing the design of health insurance markets and the provision of public programs in these countries.

The Dr. George Rosenkranz Prize is awarded by the Freeman Spogli Institute for International Studies and Stanford Health Policy to Stanford researchers of all disciplines doing innovative work to improve health in low- to middle-income countries. It is endowed by the family of the late scientist who devoted his career to improving health-care access across the world.

The $100,000 award will allow Serna to focus on the oral contraceptives market in Colombia. She notes that Latin America has the highest teenage pregnancy rates in the world, due to the lack of access to and the high cost of oral contraceptives. In 2019, the government of Colombia imposed price ceilings on 64 oral contraceptive brands that were being sold at prices three times higher than in Canada and Norway.

Drug spending in Colombia represents 21% of total health-care costs and increased by 4 percentage points between 2013 and 2018, Serna said. To control these significant hikes, the government imposes price ceilings for prescriptions and over-the-counter medications. While these efforts lead to regulated oral contraceptive prices dropping by 60% and an increase of sales by 35%, Serna said little is known about the impact price controls have had on women’s’ health, access to affordable medications, health outcomes and distribution across disadvantaged groups such as low-income mothers.

While it appears logical that capping the price of contraceptives would improve access, it can have the opposite effect by hurting supply. This conundrum is at the heart of Serna’s project: to test for the best model that balances supply and demand.

“I hope that this research will inform governments in low- to middle-income countries on the best policies to control medication prices and on the potential unintended consequences of price controls on patient health,” Serna said. “The equilibrium model of the market for oral contraceptives will allow us to simulate welfare and health effects of different price setting mechanisms such as centralized government bargaining.”

She believes this research will expand our understanding of scalable health systems in developing countries by analyzing rich administrative datasets and answering questions related to the design of health-care markets, the evaluation of government health-care policies, and the simulation of market mechanisms to improve patient health.

“The selection committee was highly impressed by Natalia, an outstanding young health economist, and her work studying the role of price regulations for oral contraceptives in Colombia,” said Grant Miller, PhD, MPP, professor of health policy and chair of the Rosenkranz Prize selection committee. “Price regulations are common policy tools to make drugs more accessible in many countries—but they also can backfire, stifling supply. Natalia’s project will identify the intended and unintended consequences of such price regulations and provide evidence on alternative approaches that may better achieve the social goals of promoting accessibility while also not hampering supply, with broad implications for health policy and health in many countries around the world.”

Serna will travel to Colombia to evaluate large datasets from the Colombian Drug and Safety Agency database, the Ministry of Health’s Price Information System for Medications and Medical Devices, as well as the Ministry of Health’s anonymized, individual-level health claims data from 2018 to 2019 and data, which shows every birth and death from 2009 to 2021, including weight at birth, insurance status and cause of death.

Combining this data, Serna will pursue four research goals:

• Quantify the causal effect of price ceiling regulation on prices and quantities of oral contraceptives in Colombia.
• Quantify the casual effect of oral contraceptive price regulation on access to medications and women’s health outcomes.
• Explore heterogeneous effects of the policy across different income groups, insurance stats and geographies.

• Design a supply-and-demand model of the market for oral contraceptives to assess the impact of alternative policies for price controls, such as government bargaining with drug manufacturers.

   

“Being awarded the Rosenkranz Prize is a testament that investigating the scalability of health systems in low- to middle-income countries is valuable for policy and market design, as well as for population health,” said Serna.

The health economist notes that analysts typically study how governments help their citizens get good health insurance and how insurance companies decide which hospitals to work with—but this research is mostly done in high-income countries.

“Answering these questions for low- to middle-income countries that share similar market structure is important for the goal of reducing health disparities around the globe,” she said.